Crack cocaine and education

We propose the rise of crack cocaine markets as an explanation for the end to the convergence in black-white educational outcomes beginning in the mid-1980s. After constructing a measure to date the arrival of crack markets in cities and states, we show large increases in murder and incarceration rates after these dates. Black high school graduation rates also decline, and we estimate that crack markets accounts for between 40 and 73 percent of the fall in black male high school graduation rates. We argue that the primary mechanism is reduced educational investments in response to decreased returns to schooling.

‘After constructing a measure to date the arrival of crack markets in cities and states, we show large increases in murder and incarceration rates after these dates.’

Fascinating term, ‘crack markets.’ Seeing as how the ‘crack markets’ of DC were well fueled by a metropolitan region with a surrounding population that was easily 4x larger than DC’s. Though many of the more affluent users (why yes, I am actually referencing the GMU and Northern Virginia of 1986 or so for anecdata) would never use crack – they only bought the shiny crystals from those who could guarantee its artisanal origin.

Strangely, even with all the cocaine trafficking in Northern Virginia during the 80s real estate boom years (and let’s not forget all those ‘secret’ filghts on the contra circuit), no one cut funding for Fairfax County’s schools.

Somehow, I don’t think crack was exactly a reason for why ‘crack market’ regions had problems – and while it was certainly a cause (among many), it was undoubtedly an even more plausible excuse for doing what those recently elected to power had been itching to do for a while.

But maybe this is just too a bit inside/around the Beltway, while living there during that time.

DougOctober 11, 2012 at 4:24 pm

I doubt there’s little to no impact derived from increased crack consumption, the issue at hand is crack distribution. After all free base cocaine was generally considered an upper-class drug from 1890-1980. Before the Harrison Act black laborers preferred powdered cocaine while freebase cocaine was the domain of the aristocrats and housewives.

So the fact that the Virginia suburbs were also smoking crack at the same time isn’t the issue. The harm came from the drug dealers, not the drug users, and the dealers were all centered in inner cities. Previous to the advent of crack, drug markets were tightly centralized and controlled by concentrated organized crime families all the way down to street level. The oligopoly of criminals kept the peace as it was in their common interest to keep violence to a minimum.

Crack radically changed the economics. A small unaffiliated crew could pay retail price for powdered cocaine, cook free base cocaine in a few hours and flip it on the street. Crack commanded a much higher price, particularly after the change in the mandatory minimums that made crack significantly more punishable. A dealer could still make huge margins even if he couldn’t buy cocaine at wholesale. This was radically different than the previous powdered cocaine and heroin markets, where the economics dictated that every dealer had to be connected.

With fragmented organizations the equilibrium radically shifted. All criminals suffer from the increased law enforcement presence that comes with intensified violence. Minimizing violence is like a public good for the criminal organizations. The more of them there are the more likely someone is to defect and the situation quickly escalates to decentralized war from concentrated peace.

Brian DonohueOctober 11, 2012 at 5:16 pm

+1.

such a relief from the ‘I’m a creepy xenophobe’ vs. ‘I can’t handle the truth’ cage match.

Any drug use is a symptom of a larger problem. Competent treatment deals with the cause rather than the effect.

DCBILLSOctober 11, 2012 at 10:57 am

Another wacked out excuse for black under achievement. When NFL players are 90% white, I’ll accept equality of the races as likely true.

There are differences. Deal with it. Deploy Occam’s razor and discover reality.

prior_approvalOctober 11, 2012 at 11:24 am

Well, when (and if, obviously – who knows, some other group may develop a major interest in American football other than those defined as ‘white’ and black’) the majority of NFL coaches are black, what will you say? Because there is this interesting NFL tidbit –

‘Even after this incident, racial integration was slow to come to the NFL; the first black player, George Taliaferro (who signed with the rival All-America Football Conference instead of the NFL), was not drafted until 1949, and only then in the 13th round of the draft.’

And then there is this little historical tidbit about black NFL coaches –

‘Fritz Pollard was the first black head coach in the NFL, when he was a player/coach for the Akron Pros in 1921. Unfortunately for Pollard and the eight other black players in the NFL at that time, they were kicked out of the league in 1926. After 1933 the NFL would not see another black player until 1946, when a contract between the Cleveland Rams and the Los Angeles Coliseum stated that the Rams had to integrate the team.

Even scarcer from the history of the NFL were black head coaches. After Pollard, nearly 70 years went by without one, until Art Shell became the head coach of the Los Angeles Raiders in 1990. ‘

Well, if they came from the players (which they tend not to) then they might tend to come from the quarterback or offensive line corps, which tend to be white.

MDOctober 11, 2012 at 12:33 pm

And that can’t or won’t change? When I was a kid, there were no black QBs. Now there are.

Andrew'October 11, 2012 at 12:49 pm

You must be old. And even if all the quarterbacks were black coaches still wouldn’t come from NFL players generally.

And why would all quarterbacks be black, because blacks are better at football?

You think that it is whitey holding the man down? Uncle Tom Brady? He’s only the best quarterback ever because the black guy who is better than him has been oppressed?

MDOctober 11, 2012 at 1:02 pm

Jesus, what’s your childhood trauma? I suggest that maybe you might be wrong, and now you’re saying I’m racist because … what? Nevermind, I’m pretty sure the answer is just that you are an asshole.

Andrew'October 11, 2012 at 1:35 pm

Huh?

I’m the guy who never assumes anyone is a racist.

Let’s recap, I asked PA why one would assume all the NFL coaches would be black. You asked why assume they wouldn’t. I didn’t assume that. I offered an explanation why they might be black, the assumtion that coaching has something to do with playing, the reason I assume people assume there should be more black coaches. I offer the reason that still wouldn’t work, that quarterbacking is the most likely player-to-coach pathway, and I had to search through about 6 teams before finding a player-to-coach success story, Jim Harbaugh, QB. Then you ask why that might not change, well why would it change? Would we just assume that there should be more black quarterbacks because the historical trend has been from none to a few, and thus some day it will be all black quarterbacks?

Andrew'October 11, 2012 at 1:38 pm

I would assume that NFL coaches will not be all black because blacks are 10% of the population.

j rOctober 11, 2012 at 12:26 pm

“There are differences.”

I cannot think of a less precise, less meaningful phrase than that. And yet, in certain circles it passes for great wisdom.

gregOctober 11, 2012 at 3:33 pm

And “There are no differences” passes for religion in other circles.

j rOctober 11, 2012 at 5:20 pm

So? That’s real kindergarten logic. “I’m going to be wrong, because the other guy over there is wrong in the opposite direction.”

What’s with the “p<.1" standard? I'm used to seeing "p<.05" in econ journals. The only time I've seen "p<.1" is in poli sci but that's when they're dealing with tiny samples composed of states. In contrast this is a huge dataset and even with all the fixed-effects there's got to be big degrees of freedom.

Scott EllisonOctober 11, 2012 at 11:54 am

Good lord! Perhaps if they had actually conducted a literature review that looks at actual educational research they would have discovered that the time period in which the differences in educational attainment narrowed coincided with a decrease in segregation [especially in the South] and then expanded when the process of re-segregation began in the 1980’s.

There is much to admire about economics as a discipline, but the hubris of economists helicoptering into other fields without practicing due diligence to understand the subject matter at hand is mind-blowing.

MillianOctober 11, 2012 at 12:10 pm

SOME economists. Jeez. And as we can see from this discussion, economists who are eager to impute bad motives to minorities, at that.

Scott EllisonOctober 11, 2012 at 12:15 pm

Agreed. SOME economists. However, it does appear to be a growing trend. See: the genomics post and comments.

gregOctober 11, 2012 at 3:38 pm

And other economists/social scientists/progressives eager to deny motives to minorities–they’re always passive agents being acted upon.

gergOctober 11, 2012 at 9:40 pm

Greg, why don’t you just point on your white sheets already and be quiet?

Andrew'October 11, 2012 at 12:20 pm

It’s supposed to impress other economists…

ArnieOctober 11, 2012 at 12:42 pm

They actually did a good job of explaining that and what exactly they were estimating. See page 2 paragraph 1.

Scott EllisonOctober 11, 2012 at 1:28 pm

Not at all. There is a rich body of research literature on this very subject that is breezed by with two inadequate citations. I expect more from my grad students. I’m not saying not to do the research. Just practice due diligence. It might even make for better research and a stronger contribution to our literature.

ArnieOctober 12, 2012 at 1:44 am

I don’t deny that we as economists are often brazen about the existing content expertise. And maybe I am missing something. But it seemed pretty clear that they referred to 2 separate, albeit related, phenomena regarding convergence trends. The one has a deeper literature and they state that that is not the one they are addressing. They are addressing the other. I understand the chafing when larger content area is breezed through, but I don’t see how it would have added much. And when they actually get into the empirics there is even more clarity on the issues. Any more literature would not change how they represented their findings. They very clearly explain how the other competing models from said literature explain the trends.

Just pointing out that there are times to call out economists and others, but this doesn’t seem like one. At least not imply that they are fools. At worst, it’s another data point in the literature.

The other two measures that Dr. Orfield uses have similar problems. Most of the change in all three are probably caused by the increase in the percent of Hispanics and the decrease in the percent of non-Hispanic whites, not by segregation. By most mathematically sensible measures, segregation has decreased and integration has increased over the last 20 years. See “Measuring School Segregation” by David M. Frankel and Oscar Volij for details: http://www.econ.iastate.edu/research/working-papers/p11808

The theory makes a lot of sense. There is a lot of evidence that the black community fell into a tailspin in the late 1980s and early 1990s (crack, the related phenomenon of gangsta rap, the LA riots, a huge spike in homicide among young males, a big spike in out-of-wedlock births to young black females, the shameful reaction to OJ’s acquittal).

In turn, there must be a more heartwarming story that somebody ought to research of how the black community started to pull itself back together after staring into the abyss of the Crack Era and made a decent comeback in the later 1990s.

My impression from having lived in Chicago in 1982-2000 was that crack didn’t hit Chicago as hard as it hit NYC, LA, and DC. Perhaps some of Chicago’s current crime problems stem from not having gone through the refining fire of the crack era, which in other cities taught a lot of younger brothers to stay out of the gang life that had wrecked their older brothers’ lives?

Michael ChadwickOctober 11, 2012 at 9:14 pm

As aforementioned above, cocaine was considered at its peak a primary upper class drug. Many Drugs on the market during the late 1800’s and early 1900’s were primarily opiate or alkaloid based. Relating back to a project I did my sophomore year of college, around 80% of the drugs on the market were made from opiates or alkaloids( the movie the union goes on into further depth about this fact). To simply imply that crack cocaine is drug that holds back african americans from achieving high levels of success or education is absurd. I say that on two accounts. The first is the largest “crack market” (in leu of a better word) many would say is San Francisco, primarily the bay area. Cocaine was imported over from Mexico at dirt cheap prices and then essentially cooked into crack using various techniques that were cheap and effective to produce one of the most addictive and cheapest drugs. San Fransico is the west coast melting pot in my opinion. You have a large latino, white and african population with many sub categories. It is not primarily african american. The second point i would like to bring out is the fact many african american glorify the drug as essentially a gateway to getting rich and having everything you could ever want. Some examples of this are Notorious BIG “10 crack commandments” or E40s “The Recipe”. Nobody is holding a gun to anybody’s head and telling them to sell or do crack. Call me young or nieve but thats how I feel about this.

we show large increases in murder and incarceration rates after these dates. Black high school graduation rates also decline, and we estimate that crack markets accounts for between 40 and 73 percent of the fall in black male high school graduation rates.

PDOctober 12, 2012 at 4:25 pm

This seems like it has a clear endogeneity problem. No convincing argument for why arrival of crack is exogenous to local conditions. Don’t see how these results can be interpreted as causal.